Takoma Overlook Condominium CONDOMINIUM UNIT PURCHASE AGREEMENT

Transcription

1 Takoma Overlook Condominium CONDOMINIUM UNIT PURCHASE AGREEMENT Title to be conveyed in the name(s) of: Purchaser Name Building No: 7333 New Hampshire Avenue, Takoma Park, Maryland Condominium Unit No: Unit # Percentage Interest: See "Declaration" (defined below) # of Assigned Parking Spaces Included 1 in Purchase: Development Phase (1 or 2) Phase # Anticipated Settlement Date: October 1, 2008 (Development Phase 1) March 1, 2009 (Development Phase 2) THIS AGREEMENT (this Agreement ) is made as of the Effective Date (as hereinafter defined) by and between TENACITY 7333 NEW HAMPSHIRE AVENUE LLC, a Maryland limited liability company ("Seller") and Purchaser Name (whether single individual or multiple individuals "Purchaser"). WHEREAS, Seller is the owner of certain land located at 7333 New Hampshire Avenue, Takoma Park, Maryland 20912, together with the buildings located thereon (collectively, the Property ); and WHEREAS, Seller has submitted or intends to submit the Property to the effect of the provisions of Title 11 of the Real Property Article of the Annotated Code of Maryland (2003 Replacement Volume), as amended (the Condominium Act ), the Property thereafter being known or to be known as Takoma Overlook Condominium (the Condominium ); and WHEREAS, Purchaser wishes to purchase the Condominium Unit identified above and as shown on the plat and plans of the Condominium (the "Condominium Plat and Plans"), together with the undivided interest in the common elements of the Condominium appurtenant to such Condominium Unit (the "Common Elements") as defined in the Declaration of Takoma Overlook Condominium (the "Declaration") filed or to be filed with the Office of the Clerk of the Circuit Court of Montgomery County, Maryland (the "Land Records"); Now therefore, in consideration of the payment of the Deposit (as hereinafter defined) to Seller, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser agrees as follows: 1. BASIC TERMS. 1.1 Defined Terms. Capitalized terms used herein without definition shall have the meanings specified for such terms in the Declaration; otherwise, terms not defined herein shall have the meanings specified for such terms in Section of the Condominium Act. 1.2 Terms of Purchase. Seller agrees to sell and Purchaser agrees to purchase (a) the Condominium Unit identified in the Declaration as Condominium Unit No. Unit # (the "Condominium Unit" or 1

2 the Unit ) and (b) the exclusive right to use and occupy the Limited Common Element parking spaces (referred to herein as the "Parking Spaces") identified in license agreements provided by Seller at Settlement (the "License Agreements"). The Unit s Percentage Interest in the Common Elements of the Condominium (the "Percentage Interest") is as set forth in the Declaration. Seller shall have the absolute discretion to determine which actual Parking Spaces Seller shall assign to Purchaser at Settlement. At Settlement, Seller and Purchaser may enter into the License Agreements for the selection of one or more numbered Limited Common Element Parking Spaces. Notwithstanding the assignment of any numbered Parking Spaces to Purchaser identified in such License Agreements, Seller shall have the right, in Seller s sole discretion, prior to and following Settlement, as applicable, to relocate any Parking Spaces, if applicable, or to substitute a different numbered Parking Space within the Condominium (i) in the event an error is made by Seller in the numbering or allocation of said Parking Spaces to Purchaser; (ii) in the event any Parking Spaces in the Condominium are reconfigured; or (iii) if Seller is required to relocate said Parking Spaces in order to comply with applicable law (including, without limitation, the Fair Housing Act or Americans With Disabilities Act) and/or the terms of any easements or covenants of record. Further, Purchaser acknowledges and agrees that, in the event any Parking Spaces to be assigned to Purchaser pursuant to the terms of the License Agreements are not available for immediate assignment to Purchaser at the time of Settlement, then Seller shall have the right in its sole discretion to temporarily designate an alternative Parking Spaces for use by the Purchaser until the Parking Spaces to be assigned to Purchaser becomes available. Purchaser hereby agrees that the substitution or the temporary designation by Seller of a different or alternative numbered Parking Spaces within the Condominium shall not constitute a default of Seller pursuant to this Agreement, entitle Purchaser to terminate this Agreement, give rise to any claims for damages against Seller, entitle Purchaser to delay or postpone the date of Settlement, or permit Purchaser to refuse to settle. 1.3 Plat Designation of Unit. The description, location, and area of the Unit are shown, or will be shown, on the Condominium Plat and Plans. Such Condominium Plat and Plans are recorded or will be recorded on or before the date of settlement hereunder, together with the Declaration among the Land Records of the State of Maryland. Purchaser has no right of approval of said Condominium Plat and Plans. Purchaser acknowledges that the Condominium Plat and Plans have been or will be prepared by a licensed professional surveyor and/or engineer and Seller does not warrant or guarantee in any manner the accuracy of the Condominium Plat and Plans or their compliance with the Condominium Act or other applicable law. 2

3 2. PURCHASE PRICE; TERMS OF PAYMENT 2.1 Purchase Price* $ 2.2 The Purchase Price shall be paid as follows: $ (a) Deposit to be paid upon signing this Agreement, and to be applied as part payment of the Purchase Price; receipt of which amount is hereby acknowledged $ (b) Loan proceeds (if any) $ (c) At time of Settlement, in cash or by certified check or by wire transfer of immediately available funds (exclusive of any Settlement costs and prorated amounts)** $ * The Purchase Price of the Unit includes the assignment of 1 Limited Common Element Parking Space. Purchaser acknowledges that this figure is exclusive of Settlement costs, prorated amounts, Unit Owners Association fees and any other amounts required to be paid by Purchaser pursuant to this Agreement. ** Purchaser acknowledges that this figure in only an estimate and in all events Purchaser shall be required to pay to Seller at Settlement the entire Purchase Price (to which the Deposit shall be credited) and any other amounts required to be paid by Purchaser pursuant to this Agreement. 2.3 Deposit. Purchaser acknowledges and agrees that the Deposit will be held (by Seller, by Tenacity Settlements, LLC, or by such other escrow agent that Seller shall designate or approve at the request of Purchaser) in an interest-bearing escrow account in accordance with Section of the Condominium Act. At Settlement the Deposit will be applied toward payment of the Purchase Price and any interest earned on the Deposit will be paid or credited to Purchaser. If this Agreement is terminated for any reason, the Deposit (and all interest accrued thereon) will be paid to the person lawfully entitled to the Deposit under the terms of this Agreement. Seller shall have no liability to Purchaser if the Deposit is not placed in an interest-bearing escrow account in the event Seller approves a party requested by Purchaser to serve as the escrow agent. 3. FINANCING Purchaser hereby elects the following method of financing, pursuant to the terms of this Agreement: (Purchaser to designate applicable financing): [ ] No financing arrangement (all cash). [ ] Financing arranged through lender of Purchaser s choice ("Purchaser's Lender"). [ ] Financing arranged through lender(s) designated by Seller as its designated lenders (which may be through the mortgage broker services of Seller s affiliate Tenacity Mortgage) (each a Designated Lender ). [ ] Financing arranged through lender(s) designated by Seller as its preferred lenders (each a Preferred Lender ). Lender s Designated Lenders and Preferred Lenders are identified on Schedule B attached hereto. 3

4 As used in this Agreement, the term "Lender" shall mean the lender (whether Purchaser's Lender, a Designated Lender or a Preferred Lender) selected by Purchaser above. 3.1 No Financing Arrangement (all cash). If Purchaser elects to pay the Purchase Price all in cash, then this Agreement shall be in no way contingent upon Purchaser obtaining any financing and Purchaser assumes full responsibility to initiate and pursue all steps necessary to obtain the funds required for Settlement. Further, within fifteen (15) days from the Effective Date, Purchaser shall provide Seller proof of Purchaser's financial ability to pay the balance due at Settlement. If Purchaser, upon request by Seller, fails to promptly provide proof satisfactory to Seller, in Seller s sole discretion, of Purchaser's financial ability to pay the balance due at Settlement, then Seller, at Seller s sole option, may terminate this Agreement and pursue any of the remedies provided in Section 12 of this Agreement (including but not limited to terminating this Agreement). If Purchaser fails to pay the Purchase Price due at Settlement, then Seller may, at its sole option, pursue any of the remedies provided in Section 12 of this Agreement. 3.2 Financing Arrangement. If Purchaser elects to obtain financing through Purchaser's Lender, any such Purchaser's Lender shall be reasonably acceptable to Seller. If Purchaser elects to obtain financing through a Purchaser's Lender, a Designated Lender or a Preferred Lender, Purchaser shall make prompt application therefore and this Agreement shall be contingent upon financing for a period of thirty (30) days from the Effective Date (the Financing Contingency Period ). Within thirty (30) days from the Effective Date, Purchaser shall provide Seller with (i) a letter from a lender reasonably acceptable to Seller stating that Purchaser is approved for a mortgage in the amount indicated in Section 2.2(b), subject only to conditions deemed reasonable by Seller in its sole discretion, and (ii) proof satisfactory to Seller, in its sole discretion, of Purchaser's financial ability to pay the balance due at Settlement. If Purchaser fails to comply with such provisions, then Seller may, at its sole option, pursue any of the remedies provided in Section 12 of this Agreement (including but not limited to terminating this Agreement). If during the Financing Contingency Period, Purchaser cannot obtain financing approval, then Purchaser at its sole option may terminate this Agreement by delivering written notice to Seller on or before the expiration of the Financing Contingency Period (in which case the Deposit shall be returned to Purchaser). Upon expiration of the Financing Contingency Period, this Agreement shall not be contingent on financing and if Purchaser fails to pay the Purchase Price due at Settlement, then Seller may, at its sole option, pursue any of the remedies provided in Section 12 of this Agreement. 3.3 General Provisions Regarding Lender Financing. (i) Purchaser hereby authorizes Seller and each lending institution to which Purchaser makes application for a loan to make inquiry and investigation as to Purchaser's credit, character, reputation and financial responsibility. (ii) Purchaser acknowledges and agrees that in connection with a lending institution's underwriting of Purchaser s loan, Seller, unless otherwise required by law, rule or regulation, shall only be required to complete a standard condominium questionnaire and provide such lender with one (1) copy of the Public Offering Statement and Consumer Guide for the Condominium (which may, at Seller s option, be in a written or electronic format or on a computer disk). (iii) Seller makes no representations or warranties that Purchaser will be able to obtain a mortgage commitment, or mortgage, and Purchaser shall have the sole obligation to obtain the same. In no event shall Seller have any obligation or liability to Purchaser because of any Lender's refusal (including the refusal of any Designated Lender or Preferred Lender) to issue such a commitment or to disburse the proceeds hereunder for any reason whatsoever. (iii) This Agreement is not contingent on Purchaser s ability to comply with any terms or conditions of any pre-qualification letter or commitment, such as the sale of Purchaser s house or other property or retirement of debt, unless such contingency is specifically provided for herein or in an 4

5 addendum to this Agreement. Except as otherwise provided herein, if Purchaser fails to notify Seller immediately upon receipt of a denial of financing, all financing contingencies are automatically waived. Seller not be liable for any damages or interest rate changes caused by delays in completion or Settlement. (iv) If a commitment for the mortgage loan is issued, then Purchaser shall comply with the terms of such commitment. Purchaser agrees, when requested, to comply with any conditions of such commitment (other than those conditions that are within Seller s control) and to execute such note, deed of trust, and other instruments required by the Lender to properly document and secure the loan. Upon receipt of a loan commitment and acceptance thereof by Purchaser, Purchaser shall immediately furnish Seller with a complete copy of the commitment and Purchaser s acceptance thereof. After issuance, the commitment shall not be modified or allowed to lapse without Seller s written consent. If the Lender refuses to make the loan due to Purchaser s failure to comply with the terms of any commitment, Seller may, at its sole option, pursue the remedies provided in Section 12 of this Agreement. (v) Purchaser agrees to pay all points and fees imposed by the Lender and except as otherwise specifically agreed, Seller is not obligated to pay any fees or points charged by a Lender. If required by the Lender, Purchaser agrees to pay at settlement an initial mortgage insurance premium and further agrees to pay annual mortgage insurance premiums that accrue thereafter. (vi) Purchaser agrees to promptly advise Seller in writing of any material adverse change in Purchaser s financial condition. As requested by Seller, Purchaser shall promptly provide Seller with proof of Purchaser s financial ability to pay the balance due at Settlement. (vii) Purchaser acknowledges that Seller shall only be obligated to provide Purchaser with the credit (if any) set forth in Section 27 below if a Designated Lender or Preferred Lender finances Purchaser s acquisition of the Unit and Purchaser selects Tenacity Settlements, LLC to serve as Settlement agent and to conduct Settlement. 4. CONDITION 4.1 As-Is. The Unit shall be conveyed by Seller to Purchaser in its As-Is condition(but with any applicable Renovations (as hereinafter defined) as more particularly described in Sections 4.2 and 4.3). The Unit and the improvements therein are being sold unfurnished and will contain only the fixtures and appliances actually installed in the Unit at the time of the walk through inspection as provided in Section 6.4 unless otherwise agreed in writing to be installed by Seller after Settlement. 4.2 Unit Renovations. Set forth on the Unit Renovation Option Addendum attached hereto is Purchaser s selection of the Unit Renovation Option Purchaser desires with respect to the Unit (the Selected Unit Renovation Option ). As used in this Agreement, the term Unit Renovations shall mean the renovations that Seller will undertake with respect to the Unit in connection with the Selected Unit Renovation Option. 4.3 Common Element Renovations. As detailed in Article II, Section E of the Public Offering Statement and Consumer Guide (the POS ), Seller will undertake certain renovations to the Common Elements of the Condominium (the Common Element Renovations ) in addition to the Unit Renovations. The Common Element Renovations are capital improvements to the Condominium undertaken by Seller through and on behalf of the Association. Purchaser understands that the Common Element Renovations may or may not be commenced and/or completed until after Settlement. Purchaser hereby grants to Seller and its agents and contractors the right to access the Unit to undertake the Common Element Renovations. As used herein, the term Renovations shall mean collectively Common Element Renovations and Unit Renovations. The provisions of this Section 4.3 shall survive Settlement. 4.4 Substitutions. Seller shall have the absolute right to substitute materials, fixtures, equipment, and appliances and other finishes which Seller determines to be of substantially equal quality or performance. In addition, if Seller determines, in its sole discretion, that any components of the 5

6 Renovations become unavailable or if Seller determines that the inclusion of any components is not feasible, either structurally or economically, then Seller shall have the right to withdraw such components and the Purchase Price shall be reduced by the cost of the deleted components if the components constituted a portion of the Unit Renovations (as opposed to the Common Element Renovations) and no substitution is made with respect to the deleted components. Seller makes no representation or warranty as to the final location of any utilities to be installed within the Unit. 4.5 Changes. Seller shall have the right to make changes in the dimensions of any portion of the Condominium, provided that the changes are not material and adverse. Seller further reserves the right, but shall not be obligated, to make changes in construction as may be necessary from time to time due to design changes by the contractor or architect, the particular requirements of Purchaser s or Seller s mortgage lenders or any other governmental authority having jurisdiction over the Unit, or as may be otherwise required by material shortages, work stoppages, emergencies, necessary changes to the Plats and Plans discovered in construction for reasons of impossibility, structural soundness, aesthetics, or by acts of God, labor disputes, fire or other casualty, Seller s inability to obtain materials and/or labor, extras, options, decorator selections, or to complete work requested by Purchaser and approved by Seller, zoning requirements and laws, governmental approvals of any kind, inclement weather, or any other similar or dissimilar causes or reasons beyond the reasonable or practical control of Seller. If Seller changes the design, type, location, or standard selections or finishes, or price for other units in the Condominium or elsewhere, Seller shall have no obligation to make corresponding changes to the Unit sold to Purchaser. 4.6 Promotional Materials. The parties expressly agree that any brochures or other materials regarding the Unit, model units or the Condominium containing artist s renditions, photographs, dimensions or drawings of any nature are not binding and are for demonstrative and illustrative purposes only and may not be exactly duplicated. Any model unit maintained by Seller is not part of the basis of the bargain between Seller and Purchaser. Grades, open areas, elevations, dimensions, and the location of walks, stairs, plantings, and other landscape features, and other interior and exterior features of the Unit may not precisely conform to those displayed in any model unit maintained by Seller (including without limitation any video or computer Unit simulations or presentations) or in any promotional material supplied by Seller. Certain furniture, furnishings, wall and floor coverings, light fixtures, bookcases and other built-ins, and other decorative features and the like, as displayed in any model unit, are for display purposes only and are not considered a part of the Unit for the purposes of this Agreement. Further, the location of wall switches, thermostats, chases, plumbing, electrical outlets and similar items may vary from dwelling to dwelling (including the Unit) and may not be as shown in any model dwelling. Any floor plans, sketches or sales drawings shown to Purchaser other than those which are a part of the Condominium Plat and Plans on file with the local governing authority are for display purposes only and may not be exactly duplicated. Purchaser acknowledges its understanding that any model unit and all items therein and any promotional materials provided by Seller to Purchaser are solely for display and marketing purposes and do not constitute a warranty or representation from Seller that Purchaser s Unit will contain those same items or that the dimensions of rooms in the unit will be the same as in the model unit or promotional materials. Purchaser further acknowledges and agrees that trees and landscaping located on the property of the Condominium may be removed to accommodate the construction of the Condominium. Seller does not guaranty or warrant that the property of the Condominium will include trees or landscaping at the time of Settlement. 4.7 Variations in Materials. Purchaser acknowledges Purchaser s awareness that certain materials utilized in the construction of the Unit (including, but not limited to, brick, stone, roofing, ceramic tile, carpeting, wood panels, paint, etc.) are manufactured in lots or batches and that variances in color, texture and size may occur from lot to lot or from batch to batch. As a result, should materials used in the construction of the Unit supplied to Seller by the manufacturer be from different lots or batches, such materials may likewise vary in color, size or texture. Purchaser acknowledges that variances may also occur between materials used in the construction of the Unit and materials used in the construction of any model unit and/or the samples of materials displayed in Seller s sales office. Purchaser specifically agrees that any variances in the color, textures or size of such materials installed in the Unit, or any variances from similar materials or furniture, fixtures or appliances shown by sample or as installed in any 6

7 model unit, shall not constitute a defect in the materials or in workmanship or be a failure of Seller to build in substantial conformance with the Plats and Plans. 5. UNIT OWNERS ASSOCIATION AND CONDOMINIUM ASSESSMENT 5.1 Unit Owners Association. A condominium Unit Owners association (an "Association" or "Unit Owners Association") has been established for the purpose of operating and maintaining the Common Elements of the Condominium. Each owner of a Unit in the Condominium will automatically be a member of the Association and will be subject to the Declaration, the Bylaws and the Condominium Rules and Regulations. The voting rights of each Unit Owner are set forth in the Declaration and/or the Bylaws. The affairs of the Association will be conducted by the Unit Owners Association, as set forth in the Bylaws. Annual and special meetings of the Condominium Association shall be conducted as provided in the Bylaws of the Association. 5.2 Condominium Assessment. Purchaser acknowledges that Purchaser has been fully advised that the Unit is part of a Condominium organized under the Condominium Act, and that upon taking title to the Unit, Purchaser will have a continuing monthly obligation to pay in advance, when assessed by the Unit Owners Association, his or her share of the Unit s Percentage Interest (as set forth in the Declaration) of the Common Expenses of operating and maintaining the Condominium, as indicated in the Condominium Declaration, Bylaws, Condominium Plat and Plans and Rules and Regulations (collectively, the "Condominium Instruments"). The assessment will be based on the budget adopted from time to time by the Association. The projected budget for the first year of operation of the Condominium and a table of initial estimated monthly assessment is included in the Public Offering Statement and Consumer Guide. The projected budget is believed to be reasonably accurate, but no warranty is made or intended that the budget will not be increased either before or after Settlement, nor may one be relied upon. 6. SETTLEMENT 6.1 Settlement on the purchase and sale of the Unit ( Settlement ) shall occur on such date (the Settlement Date )and at such time as designated by Seller in a notice ( Settlement Notice ) given to Purchaser at least ten (10) days in advance of such date stating that Seller is prepared to tender title and possession of the Unit to Purchaser. Seller agrees that said Settlement Notice will not be given prior to the time the rescission period under Section 18 expires. Unless otherwise agreed to by the parties in writing, Settlement will occur at 2:00 p.m. on the Settlement Date at the offices of the Title Company. Time is of the essence with respect to Purchaser s obligation to complete Settlement on the Settlement Date. Purchaser shall pay to Seller at Settlement by certified or cashier s check the unpaid balance of the Purchase Price and all other sums payable to Seller hereunder. While Seller believes in good faith that Settlement will occur on or about the Anticipated Settlement Date (as hereinafter defined), Seller shall have no liability to Purchaser and Seller shall not been deemed to be default under this Agreement if Settlement does not occur on the Anticipated Settlement Date. As used herein, the term Anticipated Settlement Date shall mean October 1, 2008 if the Unit is in Development Phase 1 or March 1, 2009 if the Unit is in Development Phase 2. The Development Phase designation for the Unit is set forth on the first page of this Agreement. 6.2 If Settlement shall not have occurred within twenty-four (24) months after execution of this Agreement due to reasons within Seller s control, Purchaser shall have the option of either: (i) terminating this Agreement by written notice to Seller, delivered at any time prior to Seller s establishment of a Settlement date, in which event Seller shall, if Purchaser shall not then be in default, cause the Deposit (and all other money paid to Seller by Purchaser hereunder, if any) to be returned to Purchaser, and neither party shall have any further liability or obligation hereunder; (ii) electing to proceed with the purchase of the Unit when the same is completed; or (iii) pursuing any remedy which may be available in law or in equity in accordance with the Federal Interstate Land Sales Full Disclosure Act. 7

8 6.3 Notwithstanding any provision of this Agreement to the contrary, pursuant to the provisions and requirements of of the Business Occupations Article of the Annotated Code of Maryland, as amended, and as a material part of this Agreement, notice is hereby given as follows: PURCHASER MAY, AT PURCHASER S SOLE COST AND EXPENSE, SELECT PURCHASER S OWN TITLE INSURANCE COMPANY, SETTLEMENT COMPANY, ESCROW COMPANY, MORTGAGE LENDER OR FINANCIAL INSTITUTION (AS DEFINED IN THE FINANCIAL INSTITUTIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND) OR TITLE LAWYER. SELLER SHALL NOT BE PROHIBITED FROM OFFERING PURCHASER FINANCING AS A CONDITION OF SETTLEMENT. In the event Purchaser decides to make such a selection, then Purchaser shall do so by notice in writing to Seller within fifteen (15) days following the Effective Date, and any such notice shall contain the full name and current mailing address of the title company or attorney so selected. If no such notice is given by Purchaser, then Seller, upon written notice to Purchaser, may designate the title attorney or title company to conduct Settlement. This designated title company may be an affiliate of Seller. Seller s designation of a title attorney or title company in this transaction will not impair Purchaser s right to select a title attorney or title company of Purchaser s own choosing to conduct the Settlement. Purchaser acknowledges that Seller shall only be obligated to provide Purchaser with the credit (if any) set forth in Section 27 below if Purchaser selects Tenacity Settlements, LLC to serve as Settlement agent and to conduct Settlement and a Designated Lender or Preferred Lender finances Purchaser s acquisition of the Unit. Purchaser exercises the foregoing right by directing that the following title attorney or title company will conduct Settlement. (Purchaser to designate by initialing choice) (the person or entity selected being hereinafter referred to as the "Settlement Agent'): Purchaser designates the following to conduct Settlement: [ ] Name: Address: Phone: [ ] Tenacity Settlements. PURCHASER IS NOT REQUIRED TO CHOOSE TENACITY SETTLEMENTS 6.4 Seller shall afford Purchaser an opportunity prior to Settlement to walk-through the Unit and to develop jointly with Seller a final and complete punch list based on Seller s obligations under this Agreement, which punch list shall be on a form (the Inspection Form ) to be provided by Seller. Seller shall remedy such punch list items set forth on the Inspection Form as soon thereafter as reasonably practicable, but failure to remedy such items by the date scheduled for Settlement shall not constitute a default of Seller, entitle Purchaser to terminate this Agreement, give rise to any claims for damages against Seller, entitle Purchaser to delay or postpone Settlement, or permit Purchaser to refuse to settle or serve as the basis for any condition of closing. It is further agreed that there shall be no withholding of Seller s funds or any part thereof at Settlement on account of any such punch list items on the Inspection Form. Seller shall notify Purchaser not less than five (5) days prior to Settlement of the date and time that the Unit will be ready for inspection. Seller will allow a reasonable amount of time for the inspection. Purchaser may be accompanied by an agent of Purchaser at such inspection. Seller s agent may also attend the inspection. At such inspection, the Inspection Form shall be completed and executed by Purchaser and by a representative of Seller. Purchaser shall attend such inspection and participate in completing the Inspection Form prior to Settlement. Failure of Purchaser to make the inspection at the date and time specified by Seller shall constitute full acceptance of the Unit by Purchaser. Any item not listed on such Unit Inspection Form shall be conclusively deemed fully accepted by Purchaser unless otherwise specifically provided in the Limited Warranty and by the Condominium Act. Subject to the 8

9 following sentence, upon acceptance of the deed by Purchaser, Purchaser agrees to hold Seller free from liability for any defects not specifically noted in said Inspection Form. Notwithstanding the foregoing and provided a walk-through was conducted prior to Settlement, Seller, upon written notice from Purchaser received by Seller during the ten (10) day period following Settlement (time being of the essence), agrees to meet with Purchaser to update the Inspection Form (but only with respect to defects which were not visible or apparent at the time of the walk-through and based on Seller s obligations under this Agreement). Any items listed on the Inspection Form will be performed as promptly as weather and workloads permit. Purchaser agrees to cooperate and provide reasonable access by Seller or its agents or employees to the Unit for the performance of any work during normal working hours. In addition, should Seller require access to the Unit for purposes of completing construction or warranty work on an adjacent unit or the Common Elements, Purchaser agrees to provide such access to Seller, or its agents and employees. 7. CONVEYANCE OF TITLE AND POSSESSION 7.1 In General. At Settlement, Seller shall convey to Purchaser good and merchantable title to the Unit (which shall include the Unit s Percentage Interest in the Common Elements as set forth above) by special warranty deed sufficient to convey title to the Unit to Purchaser subject only to the general real estate taxes for the current tax year not then due; the Condominium Act; the Condominium Instruments; easements, covenants and conditions of record; ordinances and regulations of competent municipal or other governmental authorities; easements for sewers, water, gas, drainage, electric, telephone and other similar utilities, if any, granted or to be granted; Purchaser's deed of trust, if any and to liens or other matters over which the title company agrees to insure. Notwithstanding any other provision of this Agreement to the contrary, Purchaser s interest in this Agreement shall be subordinate to the lien of any mortgage or deed of trust placed by Seller against the Unit or the Condominium at any time prior to Settlement. However, Seller shall cause any such lien against the Unit to be released at or prior to the Settlement. 7.2 Defects. In the event that title to Unit cannot be conveyed to Purchaser at Settlement in the condition set forth in Section 7.1 due to defects in title, Seller, at Seller's option and at Seller's expense, shall have the right to cure such defect whereupon the time herein specified for Settlement by Purchaser will be extended for the period necessary for such action. In the event title is defective and Seller s does not elect to cure any such defects or Seller, despite electing to do so is unable to cure such defects, the Deposit shall be returned to Purchaser and this Agreement shall terminate and become null and void. Seller and Seller s agents are hereby released from any and all liability for damages by reason of any defect in the title. 7.3 Future Easements. Notwithstanding anything contained in this Agreement to the contrary, the Unit is sold subject to easements, if any, created or to be created, prior to or after Settlement, in favor of utility companies, municipal authorities, or quasi-governmental authorities for the installation of utilities or street lights or roads and/or additional covenants, rights-of-way, conditions, restrictions or easements which may be placed of record by Seller after the Effective Date. This Agreement shall be subordinate to any such easements, rights-of-way, covenants, conditions and restrictions of record. If such easements, rights-of-way, covenants, conditions or restrictions are placed of record after Settlement and recordation of the deed, Purchaser shall, and does hereby agree to, subject the Unit to all such easements, rights-of-way, covenants, conditions and restrictions and subordinate Purchaser s fee interest therein to all of same. The provisions of this Section 7.3 shall survive Settlement. 7.4 Settlement Documents. At Settlement, Seller shall execute and deliver all documents necessary to effect and complete the Settlement, including but not limited to (i) a special warranty deed sufficient to convey fee simple title to the Unit as herein provided, and (ii) a settlement statement reflecting the disbursement of all funds in connection with Settlement. At Settlement, Purchaser shall execute and deliver all documents and all funds necessary to complete Settlement, including, but not 9

10 limited to (i) the remainder of the Purchase Price and all Settlement costs due from Purchaser; (ii) the Settlement statement; and (iii) all mortgage and title company documents required by the lender or title company. 7.5 Indivisibility. This Agreement is a single, indivisible contract and the delivery to and acceptance of the deed by Purchaser shall be deemed and considered as full performance and compliance by Seller of all the terms of this Agreement, and as a release by Purchaser of any and all rights, obligations, claims, or causes of action against Seller. 7.6 Possession. Possession of the Unit shall be given to Purchaser after Settlement. Notwithstanding the delivery of possession to Purchaser as aforesaid, Seller shall have the right to enter upon the Condominium at any time before or after Settlement, and, upon reasonable prior notice, the Unit, for the purpose of (i) undertaking Renovations and (ii) making exterior changes to the Condominium or the Unit, including, but not limited to, changes as may be required by Seller s site plan, the Condominium Plat and Plans or any modifications thereof, or any changes which may be required as a condition of Seller s release by applicable governmental authorities from any and all subdivision or site plan bonds or other escrows. 8. SETTLEMENT COSTS 8.1 Settlement Costs. SECTION OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND PROVIDES THAT, UNLESS OTHERWISE NEGOTIATED IN THE CONTRACT OR PROVIDED BY LOCAL LAW, THE COST OF ANY RECORDATION TAX OR ANY STATE OR LOCAL TRANSFER TAX SHALL BE SHARED EQUALLY BETWEEN THE PURCHASER AND SELLER. In all cases, regardless of the attorney, title company, or Settlement Agent conducting Settlement under this Agreement, Seller and Purchaser agree that Purchaser shall be solely responsible for all applicable recordation taxes and State and local transfer taxes, all owner s and Lender s title insurance premiums and fees, mortgage insurance premiums, if any, as well as for any fees or costs assessed by the Lender (except as may otherwise be provided in Section 27 below), including, but not limited to, loan placement fees, Lender s counsel fees or document preparation or review fees, and Purchaser shall also be responsible for the payment of all title insurance company or Settlement Agent fees and Lender delivery and messenger fees, notary fees, document preparation fees, Purchaser s attorney s fees, Lender inspection fees, tax service fees, all conveyancing and recording fees, recordation taxes on the deed and any purchase money deed of trust or other deed of trust, preparation of trust, note and/or power of attorney, insurance and tax escrows, and prepaid items required by the Lender. THIS PARAGRAPH DOES NOT APPLY UNLESS EACH PURCHASER IS A FIRST-TIME MARYLAND HOME BUYER OR A CO-MAKER OR GUARANTOR OF A PURCHASE MONEY MORTGAGE OR PURCHASE MONEY DEED OF TRUST AS DEFINED IN (i) OF THE TAX- PROPERTY ARTICLE OF THE MARYLAND CODE FOR THE CONDOMINIUM UNIT AND THE CO- MAKER OR GUARANTOR WILL NOT OCCUPY THE RESIDENCE AS THE CO-MAKER S OR GUARANTOR S PRINCIPAL RESIDENCE. Section (c)(l) provides that the entire amount of recordation tax and local transfer tax shall be paid by the seller of improved, residential real property that is sold to a first-time Maryland home buyer who will occupy the Condominium Unit as a principal residence, unless there is an express agreement between the parties that the recordation tax and local transfer tax will not be paid entirely by the seller. Section (c)(2) provides that the entire amount of State transfer tax shall be paid by the seller of improved, residential real property that is sold to a first-time Maryland home buyer who will occupy the Condominium Unit as a principal residence. The provisions of subsection (c) of will apply only if each Purchaser (if there are two (2) or more Purchasers) provides a statement that is signed under oath by the Purchaser(s) at Settlement stating that: (A) (1) the Purchaser is a first-time Maryland home buyer as defined under subsection (a) of ; and (2) the residence will be occupied by the Purchaser as the Purchaser s principal residence; or (B) (1) the Purchaser(s) is a co-maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in (i) of the Tax-Property Article for the Condominium Unit; and (2) the Purchaser will not occupy the residence as the co-maker s or guarantor s principal residence. If the undersigned Purchaser(s) has provided the oath required herein, Purchaser and Seller agree that in lieu of the 10

11 allocation of recordation and transfer taxes contemplated by the aforementioned Tax-Property Article, the Seller and Purchaser expressly agree that Seller and Purchaser shall each pay one-half (1/2) of the entire amount of recordation tax and local transfer tax and Seller shall pay the entire amount of State transfer tax. 8.2 Condominium Fee. At Settlement, Purchaser agrees to pay, as an initial capital contribution, an amount equal to two times the amount of the "Estimated Monthly Assessment" (Condominium Fee) for the Unit as set forth in the Public Offering Statement and Consumer Guide. This initial capital contribution will be a part of the Condominium s working capital and is in addition to, and not in lieu of, the regular condominium assessments. It is not refundable at any time. 9. SETTLEMENT ADJUSTMENTS 9.1 All monthly condominium assessments (if any) for the month in which Settlement is made, real property taxes, assessments, water and utility charges, insurance premiums and any other prepaid or proratable items shall be prorated and adjusted as of the date of Settlement. Thereafter, each of these items shall be assumed and paid by Purchaser either directly, or through the condominium fee established by the Condominium Unit Owners Association or its Board of Directors in accordance with each Condominium Unit s Percentage Interest, as set forth in the Declaration. If a final real estate tax bill has not been issued for the Unit prior to Settlement, Purchaser shall comply with such arrangements as may be established by Seller to assure payment of such taxes; any supplemental taxes shall also be prorated to the date of Settlement. 9.2 If Settlement on the Unit occurs before an individual tax bill for the Unit has been issued, Purchaser shall be required to reimburse Seller at Settlement for the amount of taxes attributable to the Unit being conveyed, pro-rated from the date of Settlement to the end of the tax year. In the event that at the time of Settlement any such item has not been allocated among the units, the total of said items for the Unit shall be allocated among the units (on an estimated basis, if necessary in accordance with each unit s undivided interest in the Common Elements of the Condominium as set forth in the Declaration). 10. WARRANTY 10.1 Statutory Warranties. EACH CONDOMINIUM UNIT WITHIN THE CONDOMINIUM WILL BE WARRANTED AS REQUIRED BY SECTION OF THE CONDOMINIUM ACT, SUBJECT TO EXCLUSIONS OF SUCH WARRANTIES AS PERMITTED BY LAW Limited Warranty. Seller shall provide all warranties of the Condominium Unit and the Common Elements of the Condominium as are required by law. By signing this Agreement, Purchaser acknowledges that, prior to entering into this Agreement, Purchaser received a complete copy of the Limited Warranty attached as an exhibit to the Public Offering Statement and Consumer Guide (the "Limited Warranty"). No other express warranty as defined in Section of the Real Property Article of the Annotated Code of Maryland other than the Limited Warranty has been made by Seller or otherwise forms any basis of the bargain between Seller and Purchaser. Purchaser agrees to sign at Settlement the Limited Warranty confirming Purchaser s consent to exclude and modify the express warranties relating to the Condominium Unit and the Common Elements of the Condominium in the manner stated in this Agreement and in such Limited Warranty Exclusions from Limited Warranty. The Limited Warranty contains various exclusions from warranty coverage. Nothing contained in the Limited Warranty shall be construed to make the Seller liable or responsible for any items of maintenance relating to the Condominium Unit or to the Common Elements or any defects caused through abuse or failure to perform maintenance by the Unit Owners or the Association. The Limited Warranty does not cover ordinary wear and tear, nor does the Limited Warranty apply to items or materials supplied by the Purchaser or persons other than the Seller or its agents, contractors or subcontractors. The Seller does not assume responsibility for any secondary damage caused by any defects, and nothing contained herein or in the Limited Warranty shall be determined to make the Seller an insurer of the personal property of the Purchaser (or with respect to the 11

12 Common Elements of the Condominium, the Association). The warranties contained in the Limited Warranty may be enforced only by those parties expressly entitled to bring a suit for such enforcement as provided in Section of the Condominium Act, as amended. The Limited Warranty does not apply to any Condominium Units, Common Elements or other improvements constructed, or to be constructed, within the Condominium by any parties other than the Seller or persons engaged by the Seller, and the Seller makes no representation or warranty whatsoever with respect to any such Condominium Units, Common Elements or other improvements. Except as expressly set forth in the Limited Warranty, Seller shall not be required or obligated to correct any defects that result from normal wear and tear, natural deterioration, or normal settling, deflection or shifting of a building or any other defects Consumer Product Warranties. As to items that are consumer products within the meaning of the Magnuson-Moss Warranty Act, such as any air conditioner, water heater, refrigerator, range, dishwasher, washer and dryer and other appliances and equipment, Seller agrees to assign to Purchaser the manufacturers warranties, without any recourse to Seller, to the extent that such manufacturers warranties are available, given and assignable. Unless required by law, Seller provides no warranty on such items. Purchaser acknowledges that Purchaser has had the opportunity to review all consumer product warranties prior to the execution of this Agreement, and Purchaser acknowledges that the warranting party, and not the Seller, is responsible therefor, and that the Purchaser shall look solely to such warranting party, and not to the Seller, with respect to the performance under or compliance with the consumer product warranty, both as to scope and duration Limitation of Liability. SELLER LIMITS ITS OBLIGATIONS UNDER THE LIMITED WARRANTY TO REPAIR AND REPLACEMENT. UNDER NO CIRCUMSTANCES WILL SELLER BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, EXCEPT TO THE EXTENT THIS DISCLAIMER IS LIMITED BY APPLICABLE LAW. EXCEPT WITH REGARD TO CAUSES OF ACTION UNDER THE LIMITED WARRANTY AND THE STATUTORY WARRANTY SET FORTH IN SECTION 10.1 ABOVE, NO ACTION, REGARDLESS OF FORM, ARISING OUT OF THIS TRANSACTION AND/OR ANY RIGHTS AND/OR OBLIGATIONS BETWEEN SELLER AND PURCHASER, SHALL BE BROUGHT MORE THAN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED. ALL SUCH CAUSES OF ACTION SHALL BE DEEMED TO HAVE ACCRUED AND THE ONE-YEAR STATUTE OF LIMITATIONS SHALL BEGIN TO RUN NO LATER THAN THE DATE OF SETTLEMENT ON THE CONDOMINIUM UNIT UNDER THIS AGREEMENT. THE PARTIES WAIVE ALL APPLICATION OF THE SO-CALLED DISCOVERY RULE Condition. Notwithstanding anything contained in this Agreement, Purchaser acknowledges that the Condominium building has been operated as a rental facility and that although Seller has made, or will make, many renovations to the Units and Common Elements, many components of the Condominium are used property that will require regular care, maintenance and replacement over time given their age and useful life. Such components are not defective and therefore, are not within the scope of the warranty Environmental Notice, Disclaimer And Waiver. Seller does not warrant any building material used in the Unit to be free from toxicity to occupants or users and therefore disclaims any liability arising therefrom. Seller is not responsible for personal allergic or other health reactions, or injury or property damage arising from building materials at or in the vicinity of the Unit. Seller makes no representation or warranty as to the presence or lack of radon, asbestos, mold, or other hazardous environmental conditions, or as to the effect of radon, asbestos, mold, or any other environmental condition in or on the Unit or the Unit. Purchaser agrees that this Agreement is NOT contingent on radon testing results or the presence or lack of radon, asbestos, mold, or other environmental conditions, in or on the Unit or the Unit. Purchaser further agrees that he shall not seek to extend the date of Settlement or withhold payment of any portion of the Purchase Price from Seller on the basis of radon, asbestos, mold, or other environmental conditions in or on the Unit or the Unit, or on any similar basis. The United States Environmental Protection Agency and state and local environmental authorities are best equipped to render advice regarding any potential risks that may exist in a particular area, the consequences associated with exposure to radon, asbestos, mold, or other hazardous environmental materials, methods 12

13 available to detect and measure radon, asbestos, or mold levels, and what, if any, remedial measures may be advisable in particular circumstances to reduce the risk of exposure to radon, asbestos, mold or other hazardous environmental materials. Seller excludes and Purchaser hereby acknowledges such exclusion and waives any representations and warranties that could be construed to cover the presence of radon, asbestos, mold, or other environmental conditions in or on the property or the unit. The only warranties in this regard that Seller is providing to Purchaser are those contained in the Limited Warranty. By closing upon the Unit, Purchaser will be deemed to have released Seller from any and all claims and liabilities relating to or arising from the presence of radon, asbestos, mold or other environmental conditions in or on the Unit, and from any and all responsibility for mitigation or remediating any radon gas, naturally occurring asbestos, mold or other environmental conditions that may be discovered in or on the Unit or the Unit. In addition, Seller is not responsible for personal allergic, health reactions, or injury or property damage arising from environmental issues 10.8 Personal Safety and Unit Security. After closing on the Unit, it will be Purchaser s obligation to secure the Unit against trespass or criminal acts. Seller has no obligation to protect Purchaser or the Unit from the acts of others or from the conditions existing within public or private streets, parks, lands or other areas not owned by Seller. Seller shall not be liable for injuries or damage resulting from any failure of defect in any burglar alarm or security system installed by seller. The only warranties applicable to security systems are those issued by the manufacturer or installer. Security systems are excluded from the limited warranty Wood Floors & Granite Countertops. Natural materials such as wood and granite have certain inherent risks when used as finishes. Risks associated with wood flooring include, but are not limited to, the appearance of cracks between the flooring boards, squeaks and variations in color, grain and texture. Since wood is a product of nature, cracks and squeaks may occur when changes in humidity levels cause expansion and contraction. Such expansion and contraction may be more noticeable in dry seasons or periods, prolonged periods of high humidity or extended periods of heat or use. Cracks and grain variation may be more noticeable in light colored wood flooring. Bleaching can soften the surface of the flooring and may cause deviation from the exact floor color finish desired. Furthermore, color often changes with usage and age. Risks associated with the use of granite are similar to the risks of wood finishes including but not limited to variation in color and grain and variation in surface at joints and seams. Due to the crystal nature of some granite, minor irregularities occur at edge conditions where seams and joints meet. While reasonable efforts may be made during manufacturing, finishing and installation to eliminate the irregularities, certain discrepancies may exist. Granite is a porous material and certain chemicals and liquids may stain or cause changes in the appearance of the granite. Furthermore, as with wood, deviation in color may occur with usage and age. Purchaser acknowledges the risks associated with the natural finishes described in this Section Purchaser hereby waives any and all claims it may have against the seller for any such risk associated with the use of natural materials as a finish surface, except to the extent such waiver is limited by applicable law. The provisions of this Section 10.9 are for informational purposes only and in no event shall anything in this Section 10.9 be deemed to imply that the Unit will contain any granite and/or wood finishes Future Work. Purchaser acknowledges that Seller and its agents may do remodeling in the building, and Purchaser agrees said work shall not constitute a breach of any duty of Seller or right of Purchaser, including but not limited to, the right to quiet enjoyment. 11. RISK OF LOSS 11.1 Risk of Loss. The risk of loss or damage to the Unit by fire or other casualty is assumed by Seller until the time of Settlement. If the Unit, any other Unit or the Condominium should be damaged, destroyed or taken by condemnation or similar proceedings prior to delivery of the special 13